Camden NJ Bankruptcy Law Blog

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Friday, December 14, 2018.

When a creditor agrees to settle a claim for a reduced amount, the amount of debt foregiven can result in taxable income. For example, if you owe $20,000 on a credit card and a settlement is reached where they agree to accept $11,000 as payment in full, the creditor is foregiving $9,000.00 of the claim. In that circumstance, the creditor will issue a 1099c to you for the foregiveness of debt. That $9,000.00 will count as income to you. There are some exceptions. If you can show you are insolvent you can avoid liability. Bankruptcy is also an exception. For example, if you filed a chapter 7 to eliminate that $20,000.00 credit card, there would not be any tax liability even though the entire $20,000.00 was eliminated. Depending on circumstances debt negotiations may be an option, but be sure to take into account the tax consequences when deciding between bankruptcy and debt negotiation. And since both the IRS laws and the Bankruptcy laws are Federal Laws, the result would be the same whether you lived in New Jersey or Pennsylvania.

Sears filed bankruptcy on October 15, 2016. According to Wikipedia, Sears was the largest retailer in the US until 1989 when it was passed by Walmart and was now 23rd largest. Recent financial changes led to the closing of the Sears at the Hamilton Mall in Atlantic County. With the filing of the Chapter 11 Bankruptcy, three more New Jersey locations are being closed: The Sears at the Deptford Mall in Deptford New Jersey, the Sears in Middletown NJ and the KMart in Glassboro NJ on Delsea Drive. The closure of the stores is a major blow for those areas because of the loss of so many jobs.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Tuesday, October 2, 2018.

You can build your credit after bankruptcy. Sometimes clients will come into my office in Cherry Hill, NJ and express concern that if they file bankruptcy they will not have credit again for 10 years. That is not accurate. In fact many times credit scores of clients are already low from missed payments and filing will actually lead to improvement in credit score. If a Chapter 7 Bankruptcy is filed, approximately three months later the individual receives their discharge. If they own a vehicle with payments and they have reaffirmed the debt, they are already on their way to reestablishing credit since their credit report will show the vehicle payments. After the bankruptcy is completed, often in less than one year an opportunity to obtain a credit card will arise. While avoiding credit cards is a good policy, it may be helpful to get a credit card with a low limit, use it for a small purchase like gasoline or groceries, and pay it off each month. At that point, your defaulted unsecured debt will have been eliminated and the current status on car payments and a credit card will have you well on your way to reestablishing credit.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Tuesday, August 28, 2018.

Lil Kim filed for Bankruptcy in Newark New Jersey and now has the same options that anyone filing would have. According to the bankruptcy filing she stopped a foreclosure sale on her house by filing. Generally the bankruptcy will allow a debtor to resume regular mortgage payments and pay missed payments over time. According to papers filed by Rushmore Loan Management she missed a mortgage payment of approximately $10,000.00 due after she filed. They want to foreclose. Because of her circumstances she is going to attempt to do a loan modification which is another option debtors have. Typically the debtor resumes payments but rather than paying the arrears through a separate payment the debtor attempts to restructure the loan so the arrears are added back into the mortgage. Although Lil Kim's assets and income and expenses are more than the typical person, the rights under the bankruptcy law are the same.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Monday, August 13, 2018.

Speak with bankruptcy attorney first. Most people are unfamiliar with the bankruptcy process. They know it can help eliminate debts but are not sure of the impact of owning assets. As a result, sometimes before going to see the bankruptcy lawyer the individual will transfer a vehicle into a relatives name or repay the relative with money received from a tax refund before seeing the lawyer. It is a mistake. First, any such transfers or payments must be reflected on the bankruptcy schedules. In addition in most instances the individuals could have filed bankruptcy and used exemptions to protect the assets. However, if they transfer the item or make the payment the trustee can overturn the transfer or payment and use it to pay your creditors. And even if you have exemptions available, since you voluntarily gave away an asset when the asset is brought back you cannot exempt it. So talk with bankruptcy attorney first if you are thinking about filing bankruptcy.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Monday, July 2, 2018.

Where you file a bankruptcy in New Jersey depends on where you live. Unlike the state courts, where there is a court house in each county, there are only three (3) Federal Bankruptcy courts: Newark, Trenton and Camden NJ. As a result, some counties are split as to where you file. For example, Burlington County residents file in Trenton, NJ except for the cities in the southern part of the county of Cinnaminson, Delran, Edgewater Park, Marlton, Maple Shade, Moorestown, Mount Laurel, Palmyra, Riverside and Riverton. The other counties that report to Trenton NJ are Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset and Warren. Any further North report to Newark, NJ. The Southern Counties file in Camden, NJ.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Wednesday, June 20, 2018.

Bankruptcy can eliminate surcharges in New Jersey. Whether you are filing a Chapter 7 or a Chapter 13, surcharges can be eliminated in most cases as long as you can eliminate your other unsecured debts as well. The law on this issue has changed over time but the current position of the NJ DMV is to no longer pursue the surcharges. If you are currently suspended solely for the nonpayment of the surcharges than the bankruptcy will allow you to apply to reinstate your drivers license. If you are suspended for another reason, the bankruptcy will address the financial obligation, but you will not be able to get your license reinstated until the non financial related suspension has been served.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Chapter 11 on Friday, June 15, 2018.

Chapter 11 Bankruptcy is available to businesses that desire to sell their assets but have debts exceeding the value of the assets. While Chapter 7 can be used for a liquidation of assets there are circumstances where it is important to maximize the amount received and selling as a going concern makes more sense. A Chapter 11 liquidating plan can be used for that purpose. However, sometimes it is necessary to have a more immediate sale and waiting until the confirmation hearing is not an option. In that situation the company can seek to sell its assets through a sale pursuant to section 363 of the Bankruptcy Code. The section is usually used to sell specific assets but more and more it is used to sell all of the company's assets. Generally the seller must demonstrate that business may not survive until confirmation and this is the best opportunity for creditors to be paid. The 363 sale is not for all sales but in some cases it may be the best option.

By Robert Braverman of Law Office of Robert Braverman, LLC posted in Bankruptcy Law on Tuesday, June 12, 2018.

Exemptions are used to protect assets in bankruptcy. A trustee will not sell your assets in bankruptcy if they are exempt. Which exemptions apply depend on where you live and how long you have lived there. For example, if you live in Cherry Hill NJ and file a bankruptcy, you would generally have the option of using the Federal exemptions or the New Jersey state exemptions. In most cases the Federal exemptions would provide more protections than the NJ exemptions. In Philadelphia PA you would also have the option of using state or Federal exemptions. Some states opt out of the Federal exemptions and you can only use the state exemptions. Even if you are living in Cherry Hill NJ and file bankruptcy there, you may not be able to use the Federal or NJ exemptions. That is because if you have not lived in your state for the last 730 days, than you must apply the exemptions used by the state where you lived before the last 730 days. It is important that your attorney is made aware of where you have resided for the few years leading up to the bankruptcy.

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